Market News
Soybeans surge as wheat buys back some losses
Soybeans were sharply higher on commercial and technical buying. Crush margins remain in positive territory, soybean oil was up following palm oil and crude oil, and overall demand continues to be strong. Soybean meal was mostly higher on bull spreading. Soybeans continue to watch U.S. planting and development conditions. Pakistan bought 352,000 tons of U.S. beans, with 55,000 tons for 2021/22 delivery and 297,000 tons for 20222/23. That followed up on China’s purchase Wednesday of 132,000 tons, split for old crop/new crop delivery, pushing the running total to 484,000 tons, with 363,000 of that new crop. The USDA’s weekly sales report is out Friday morning. China’s National Grain and Oils Information Center says the domestic crush volume moved lower last week because of margins. StoneX projects Brazil’s 2021/22 soybean crop at 124.4 million tons, up 1 million from the prior projection. ANEC says Brazil shipped 10.73 million tons of beans last month, below expectations and down about a half a million tons from a year ago. Indonesia’s trade ministry says permits have been issued for nearly 180,000 tons of palm oil since the export ban was ended last week.
Corn was mostly modestly higher, adjusting old crop/new crop spreads. Most contracts bounced back from the recent losses, keeping an eye on late planting and development weather in the Midwest and Plains. In Brazil, second crop harvest is underway, with production expected to be record large, even after falling below initial projections due to weather issues in some areas. CONAB’s next update for Brazil is scheduled for the 8th. ANEC says Brazil shipped 1.09 million tons of corn in May, smaller than expected and down on the year. Ethanol production was up on the week, while the domestic supply moved to the second lowest total for the year to date. The U.S. Energy Information Administration says production averaged 1.071 million barrels a day, up 57,000 on the week and 37,000 on the year, and stocks were reported at 22.961 million barrels, a decrease of 751,000 barrels from the prior week, but an increase of 3.373 million from a year ago.
The wheat complex was higher on commercial and technical buying. Contracts were oversold and U.S. and world weather continues to be a concern. Drought damage is the big problem in the southern Plains, spring wheat planting is an issue in the northern Plains and Canada, and while soft red winter conditions are comparatively good, portions of the eastern Midwest have excessive soil moisture. Recent rain should help France’s crop and the trade is also watching planting in Argentina and Australia. The trade continues to wait and see what happens with the proposed export corridor for Ukraine. Reports are that Russia and NATO will meet next week, but the general consensus is that Moscow wants sanctions removed or dialed back in exchange for that corridor. Whether or not Russia will live up to any promises made is a huge question mark for negotiations. Russia’s new crop wheat prices have moved higher on demand expectations. Egypt bought 465,000 tons of wheat, with 240,000 tons from Romania, 175,000 tons from Russia, and 50,000 tons from Bulgaria. State procurement of wheat by India has fallen sharply even with export restrictions in place due to damage from a late March heat wave. India has allowed nearly 470,000 tons of wheat to be shipped since those restrictions were put in place, with another 1.7 million tons reportedly sitting at ports. The USDA’s next set of supply, demand, and production numbers is out on the 10th.
